Maldives Fund Management Corporation (MFMC) on Wednesday, has formally signed the agreement with Atoll Works Private Limited for the dredging, reclamation and shore protection of 16 islands within K. Gaafaru lagoon.

According to MFMC, 14 islands out of the total will be designated for individual private island development for real estate purposes, while the remaining two will be earmarked for luxury tourist resort development.

The project encompasses reclamation of an additional 40 hectares of land on Gaafaru island, bringing the total reclamation area to 106.91 hectares.

This project also represents the first instance of simultaneous reclamation of multiple islands within the same lagoon in Kaafu atoll.

The total value of the project for dredging, reclamation and shore protection amounts to USD 36.5 million. This total includes USD 29.2 million specifically designated for the dredging 3,747,792 cubic meters of sand at the rate of USD 7.80 per cubic meter. This rate is also one of the most competitive rates observed for a reclamation project in the Maldives in recent years.

The project will proceed under a contractor financing model, facilitating swift resource mobilization and initiation of the reclamation works. Since MFMC is not required to provide any upfront payment to the contractor, the physical works of the project are expected start soon.

Repayment of the contracted amount will initiate upon the completion of island reclamation and the generation of revenue through the sale of these islands on a long-term lease basis to private buyers.

The Maldives government, via presidential decree, entrusted K. Gaafaru lagoon to MFMC for the implementation of an integrated tourism development initiative. The corporation has also finalized conceptual masterplan for the lagoon, with the reclamation works serving as the initial phase in accordance with the outlined plan.